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Giving Young Adults More Peace of Mind

HHS Secretary Kathleen Sebelius talks about continuing efforts to make it easier for young adults to be on their parents' plan, one of the immediate benefits of health reform.

Ed. Note: On Thursday at 1:00PM EDT, AARP President Jennie Chin Hansen and other health experts from HHS will take your questions in a live online chat about how reform will benefit Seniors. Submit your questions to healthreform@hhs.gov. Watch live at www.hhs.gov/live.

Many young adults under the age of 26 have traditionally had a difficult time getting access to – and affording – health coverage. In fact, young adults between 19 and 29 make up nearly one-third of the uninsured population. But thanks to a provision in the new health reform law, many Americans under 26 years old now have the option of staying on their parents’ health insurance plan starting this fall.

And that’s not all. As a result of conversations between the Administration and health insurers, we’ve worked with some major insurers like WellPoint, United Healthcare and others who have voluntarily decided to bridge the coverage gap between now and the fall, when the new law becomes effective.

This means that more young adults can stay on their parents’ plan – giving greater peace of mind to millions of American families and to a group of young people who have traditionally forgone health insurance.

HHS also sent a letter to all the major insurance companies, offering to work with each of them to expand this opportunity even further. The letter talks about closing the gap in coverage for college graduates or young adults whose birthday in 2010 made them ineligible to continue on their parents’ plans.

The new provision in the health reform law gives many young adults the security and stability they need to make choices about their next step in life, without having to worry about falling through the cracks of our health insurance system.

We are glad that some insurers have announced that adult children will receive this helpful benefit before this September deadline, and we hope that others will join them.

You can read a copy of the letter below:

April 19, 2010
Dear _______:

I am writing to urge you to join leading insurance carriers and employers in providing seamless insurance coverage to those under 26 who have a right to maintain coverage under their parents' policies effective for plan years beginning on or after September 23, 2010.

As you know, the Affordable Care Act enables young adults to remain on their parents' policies until they turn 26. This essential provision of the Act will enable young, overwhelmingly healthy people to stay in the insurance pool and retain insurance coverage at an important moment as they begin their adult lives and launch their careers.

Under the terms of the new law, this provision does not take effect until September 23, 2010. In those states which do not already enable young adults to remain on their parents policies until the age of 26, college students could be dis-enrolled when they graduate from college in May of this year, even though the law would provide them the opportunity to re-enroll as early as September 23, 2010. Similarly, those under 26 who are not in college but who reach an age disqualifying them for coverage under their parents' policy could be dis-enrolled when they reach that age, even though they have the right to be re-enrolled as early as September 23, 2010.

Enabling young adults to remain on their parents' policies between May, 2010 and the new plan year beginning on or after September 23, 2010, rather than dis-enrolling them in May and then re-enrolling them in six or more months, has substantial benefits for all involved. This action would enable young, overwhelmingly healthy people, who will not engender large health care costs, to stay in the insurance pool and retain important insurance coverage. Taking this step will also save money for your companies by avoiding the administrative costs of dis-enrolling and then re-enrolling young adults. Avoiding this gap would also eliminate an unnecessary inconvenience and disruption in health insurance coverage for both young adults and their parents.

I have been encouraged by and appreciate the willingness of some leading insurance carriers and employers that have previously agreed to maintain coverage for young adults who could be dis-enrolled in May. Taking this step is good business and will offer relief to grateful families across the country.

I look forward to hearing your thoughts regarding this matter by April 26, 2010. I hope you agree that a public-private effort, including both insurers and employers, to enable young adults to maintain seamless coverage would produce substantial benefits for all concerned.

Sincerely,

Kathleen Sebelius

Kathleen Sebelius is Secretary of the Department of Health and Human Services